House set to debate privatizing Pennsylvania liquor and wine stores

Amendment helps beer distributors

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HARRISBURG -- A liquor privatization plan that would allow wine in groceries and make liquor licenses first available to beer distributors -- while closing state stores by county -- is headed to the House floor after a Republican-driven committee vote Monday.

The House Liquor Control Committee took the plan proposed by Gov. Tom Corbett and approved a broad amendment, backed by Chairman John Taylor, R-Philadelphia, that would allow beer distributors one year to purchase one of 1,200 licenses for wine and spirits sales before any remaining permits become available to the public.

State wine and spirits stores would be phased out as private licenses increased, and once fewer than 100 stores remained, the Liquor Control Board would be required to shutter its retail operation. The state would have the option of creating up to 600 additional licenses as the stores close.

After an attempt to privatize Pennsylvania's liquor business last year made it the House floor but not to a vote, lobbyists and others lined up early Monday to watch the committee take up a plan Mr. Corbett announced in January. Members of the union representing liquor store workers stood out in their yellow shirts, and two spokesmen for the governor, including press secretary Kevin Harley, observed from the front row.

Mr. Taylor, the chairman, had said the governor's plan would disadvantage beer distributors and make beer sales too prevalent in communities, and Monday he said the amendment, sponsored by Rep. Mark Mustio, R-Moon, addresses those concerns.

"What really kills beer distributors is the real proliferation of beer in grocery stores," Mr. Taylor said. "So that's really not happening here, and that's the real big difference between the governor's plan and this one."

Still, representatives of beer distributors said the plan would unleash new competition that could handicap their business.

"This isn't 1933, and we're not coming out of Prohibition," said Jay Wiederhold, president of the Pennsylvania Beer Alliance, which represents wholesalers. "We're talking about a set of licenses that have been out there quite some time, playing by the rules laid out for them 80 years ago. Now, with the stroke of a pen, the Legislature [wants] to change those rules on them overnight and put new players in the game."

With a plan he said would generate $1 billion, Mr. Corbett has pitched his path to privatization as a way to also boost education spending. Mr. Taylor said the amended version would produce approximately $800 million.

Despite the changes, Mr. Harley said the governor was pleased with the vote and would lobby lawmakers to pass a bill.

"The governor always said his bill was a starting point and he was willing to work with the members of the General Assembly," he said. "That's what you've seen here. This is certainly something that is historic in terms of giving consumers greater choice and convenience."

Democrats protested the absence of a public hearing on the bill and said the release of the amendment Friday afternoon allowed little time to assess the proposal. Republicans countered that the issue of privatizing liquor sales has been fully vetted in previous years.

"This should have been the first step, not the last one," said Rep. Paul Costa, D-Wilkins and the committee's ranking Democrat. "The industries have never gotten their opportunity to say, 'This is how this impacts me.' If I'm a beer distributor, how does this impact me? If I'm the social services, how does this impact them?"

The committee amended and passed the bill on a party line vote, with Democrats opposed. House leaders plan to call the bill for debate Wednesday.